It’s now as easy to qualify for a new car loan as it was before the start of the COVID-19 pandemic. It grew easier to qualify for a new car loan in October, even as the average price Americans pay for a new car set a record high.
The Dealertrack Auto Credit Availability Index tracks shifts in loan approval rates, subprime share, yield spreads, and loan details including term length, negative equity, and down payments.
In October, the index increased 1.6%, meaning that auto credit was easier to get in October than in September. Access was 6.8% looser than in October of 2020.
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Credit unions loosened their lending requirements more than banks in October. Both types of lenders reached pre-pandemic levels of access.
The news comes despite continuing increases in average car sales price. In October, Americans paid an average of $46,036 for a new car – an increase of more than $5,000 in just a year.
Loan terms lengthened and down payments declined in October. Those changes can help borrowers fit a new car into their monthly budget. But they may leave borrowers owing more money on their car than it is worth.
